KIEV, March 5 (Reuters) - The Ukrainian subsidiary of Italy's UniCredit Bank cancelled a daily limit of 1,500 hryvnia ($160) on cash-machine withdrawals on Wednesday, citing "the stabilisation of the situation" in the country.

Ukraine has retained a 15,000 hrynvia daily limit on withdrawals from foreign currency accounts at all banks, which was imposed last week.

Several banks also have their own lower limits on ATM withdrawals, some of which have been lowered due to instability in the country.

The Ukrainian subsidiary of Italy's biggest bank by assets is one of the two largest Western-owned banks in Ukraine and Ukraine's sixth largest bank overall.